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Gold, WTI and aluminium prices slip on recession fears

Gold, WTI and aluminium outlook remains bearish ahead of Fed chair’s testimony to Congress.

​Gold is seen gradually declining

The gold price, which last week briefly dropped by around 3% before recovering, continues its descent but at a slower pace, ahead of the US Federal Reserve chair, Jerome Powell’s appearance before the US Congress on Wednesday and Thursday.

This will be closely followed by market players. While the price of the precious metal remains below its 200-day simple moving average (SMA) at $1,844 per troy ounce, the mid-June low at $1,806 will stay in sight.

Minor resistance above the 200-day SMA can be spotted at the 16 June high at $1,857. While the next higher current June highs at $1,874 to $1,877 cap, the last few months’ downtrend remains in place.

WTI drops on recession fears

The price of West Texas Intermediate (WTI) crude oil has dropped by over 13% from its $121.43 early June high as recession fears grow following last week’s aggressive rate hikes by several major central banks around the globe.

Mounting concerns that rising interest rates aimed at curbing inflation may cause a slowdown in demand have pushed WTI down to its two-month support line at $103.75, around which the price of oil currently trades.

If slid through on a daily chart closing basis, the psychological $100 mark, and the May low at $97.28 may be reached within days.

Immediate downside pressure should be maintained while Tuesday’s high, the last reaction high (with a higher high than that seen the day before and after), at $110.82 isn’t overcome.

Minor resistance below this level can be seen at the 17 June low at $106.37 and also along the 55-day SMA at $108.07.

Aluminium trades near one-year lows as fears of global recession bite

Aluminium’s swift decline due to worries of a potential global recession decreasing demand for the metal has taken its price close to Monday’s low at $2,481 with the July 2021 lows at $2,432 to $2,421 representing the next downside targets.

These levels will remain in view while aluminium stays below Tuesday’s high at $2,558 on a daily chart closing basis.

Further resistance can be found at the December 2021 low at $2,582 and more significant resistance at the $2,649 16 June high.


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